MADRID | By JP Marín Arrese | Plummeting oil prices are sending shock waves to stock markets as investors fear the violent swing might cripple the global economic balance. Some exporting countries like Russia are crumbling while investments in industries face widespread disruption as they become out-priced. Even if importing countries are footing a downsized bill in the short run, volatility is never welcome.
ZURICH | UBS analysts | We see 4 wins for Germany in a backdrop of falling oil prices
1) German equity market is not exposed to Oil & Gas earnings. 2) While our Oil & Gas analysts expect energy capex to fall by 10% (which could hurt a cyclical Germany), the overall fall to European capex is < 3%. Plus capex is already at a 23 year low – can it get much worse? 3) Our economists think lower oil triggers sovereign-based QE given their view it pushes CPI even lower than Tuesday’s 0.3%.
MADRID | The Corner | Benchmark Brent crude dived on Tuesday to its lowest in five years, plummeting below $66 a barrel after plunging more than 4 percent the day before on worries of a swelling supply glut, according to Reuters. Oil prices are likely to remain around $65/barrel for the next six or seven months, the chief of Kuwait’s national oil company said on Monday, in the latest sign that Gulf producers are ready to ride out plunging prices. According to experts at Link, this could lead to tensions on the money markets.
MADRID | By Francisco López | The collapse in the price of raw materials in the last number of weeks is good news for consumers, but very bad news in macroeconomic terms because of the heightened risk of deflation in the eurozone. Oil continues to plummet and a barrel of Brent is now priced at $82, 30%, lower than its June level and is currently trading at a four year low.
LONDON | By Kevin Norrish at Barclays | What’s all the fuss about? On many occasions over the past few years, oil prices have spiked higher only to fall back rapidly into the prevailing trend of narrow range trading and steadily falling volatility. So is the recent pickup in oil prices anything more than just another blip?
MADRID | By Donato Ndongo-Bidyogo | Its oil reserves – 15.6 billion barrels, 2.5 million exported daily – and gas (three million cubic meters) make Nigeria the leading African economy, outperforming South Africa. A notable industrial potential, petrochemicals and cinema industries stand out: Nollywood released more than 7,000 movies in the last decade, just surpassed by India (Bollywood) and ahead of the USA (Hollywood).
By Ray Kwong | It’s not an “ultimate weapon” like the Death Star from the Star Wars movie franchise, but the giant oil rig that China has parked just 140 miles away from Hanoi is equally as ominous. Much as the Galactic Empire used the Death Star’s presence to keep the weak in line, China’s decision to position the rig in the South China Sea in an area claimed by Vietnam is a demonstration of its regional muscle and resolve to assert its territorial claims.
LONDON | By Barclays analysts | Although there is a train of thought that the sharp acceleration in US crude oil supply growth will sooner or later result in a turning point for oil prices and a possible price collapse, our analysis suggests 2014 is too early for that.
MEXICO CITY | By David Brunat | “If Mexico is capable of passing its energy reform in a way that enables them to attract foreign investment, it will mean that Canada, United States and Mexico will altogether become the new Middle East in terms of gas and oil production,” U.S. Congressman Henry Cuellar recently said. For some experts the North American country is dealing with its most important political decision of the last century.
NEW YORK | By Ana Fuentes | With the Syrian crisis dominating the G20 summit agenda, investors are expectant about the coming events and looking for the best plan. For many analysts oil is a better bet than sovereign bonds, since crude oil prices could jump more than 20 percent if a U.S. military strike drags other countries into the Syrian conflict.